If you’re looking to retire comfortably with a jumbo-sized nest egg, focus on businesses that raise the bar on themselves. In the age of generative artificial intelligence (AI), I’d look out for companies that adapt quickly to unlock substantial benefits.
Indeed, AI stands to benefit more than just the tech firms investing billions into chatbots or large language models (LLMs). Also, enterprise users of such technologies will see some productivity gains and perhaps even cost savings.
Either way, AI is one of those emerging technologies you can’t ignore. So, let’s examine three stocks that can adapt to the new age and perhaps help you achieve a fairly plush future.
Walmart (WMT)
Big-box retailer Walmart (NYSE:WMT) hasn’t only adapted to the digital age. It is starting to become an innovator in its own right. After the incredible quarterly print that sent WMT stock soaring over 7% in a single trading session, the big question is this. Just how much of a historical premium should investors be willing to pay?
At 27.7 times trailing price-to-earnings (P/E), WMT is definitely on the higher end for a retailer known for rock-bottom prices. Part of the premium can be attributed to Walmart is offering customers great deals at a time when it’s hard to stay within one’s weekly grocery budget. After all, it’s not hard to imagine that inflation is to thank for the recent sales surge.
In a recent conference call, Chief Executive Officer (CEO) Doug McMillion stated the recent quarter was “not inflation-driven results.” And that his firm is poised to continue growing “whether the environment is inflationary or deflationary.”
Consumers continue to regard Walmart as the cheapest place to shop, regardless of where prices are heading. As Walmart rolls back on prices, expect sales to swell even further, especially if rivals can’t keep up with price cuts.
Apple (AAPL)
Those who ditched Apple (NASDAQ:AAPL) may be kicking themselves right about now. The stock is now up more than 15% in the past month.
Wall Street’s narrative was that Apple was “falling behind” in the AI race. And, with a lack of a new hit product (it’s looking like the first version of Vision Pro won’t fit the bill), the firm was poised for sub-par growth.
With Apple’s upcoming WWDC24 event June 10-14, the degree of renewed investor enthusiasm is almost palpable.
Sure, a handful of big-tech firms have already had their chance to wow crowds with their latest generative AI powers.
Nevertheless, investors seem more than willing to give the Vision Pro maker the benefit of the doubt again. Consider the potential for OpenAI to share the stage at WWDC24. Only time will tell if OpenAI and Apple announce something substantial. If they do, AAPL stock may be looking at a new all-time high for the summer.
Home Depot (HD)
Home Depot (NYSE:HD) is down almost 15% from its 52-week high and 19% from its 2021 all-time high. As well-managed as Home Depot is, it still hasn’t been able to fly clear of industry headwinds. After a turbulent recent quarter, the company noted that home improvement demand faces challenges. And, the firm has to deal with the uncertainty of consumer purchasing habits.
Indeed, volatility has the potential to swing both ways. And in due time, Home Depot will find itself flying with the wind at its back again. Until then, the company faces lower expectations for future quarters, making it a potentially decent time to punch one’s long-term ticket.
Until the tides turn, Home Depot can unlock further efficiencies across operations with a helping hand from AI. Such efficiencies should help the firm make the most of the next cyclical upswing in home improvement projects. For now, the stock looks like a decent value post-Q1 at just 23.1 times trailing P/E.
On the date of publication, Joey Frenette held shares of Apple. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.